Government extends business support measures.

The Government have announced two further extensions of provisions under the Corporate Insolvency & Governance Act 2020.


Commercial landlords

The ability to evict or take goods in lieu of rental arrears has been further suspended until 25 March 2022.  The Government have produced a guide for landlords, which includes financial assistance.  The link is:

While this provision can be financially damaging to landlords, tenants also need to understand they must continue to pay rent (whether that is the contractual sum or a reduced amount under an agreement with their landlord) otherwise they are simply accruing a debt that could become unmanageable, while simultaneously increasing the landlord’s frustration, meaning they show less understanding once these provisions are lifted.

Further to the above, a director may have given a personal guarantee or, in non-payment of the rentals, could be exposing themselves to potential malpractice action (which carries personal liability) should their company ultimately fall into liquidation.

Debt enforcement

The restrictions on statutory demands and winding up petitions are being extended for a further three months until 30 September 2021.  The Government claim this is, “To protect companies from creditor enforcement action where their debts relate to the pandemic.”

It is, perhaps, interesting the announcement appears to be silent on extending the moratorium over wrongful trading, although directors, in particular, should not hold the misconception suspending wrongful trading provisions protects them if they continue trading beyond a point where creditors suffer.

While being of the view extending the above provisions further is kicking the can down the road, it is understandable.  The COVID road map has been pushed back until 19 July and with furlough to end in the autumn companies will need to re-adjust their overhead expenditure while also getting their business back on track after the adverse impact of lockdown.  Holding off aggressive creditor action to the end of September provides some breathing space for companies to recover before having to deal with aged debt.  Holding off landlords even further allows additional time for business owners to assess the viability of continued trading.

Should you have an insolvency-related issue then please contact me at PBC Business Recovery & Insolvency on (01604) 212150 (Northampton office) or (01234) 834886 (Bedford office). Alternatively, you may send an email to or access our website at

A fool with a pen in hand!

The heading pretty much sums up my view of a director who grants a personal guarantee for company debts. I am possibly being a little harsh as giving a personal guarantee can sometimes be a non-negotiable term of contract or borrowing.

In the past I have seen directors who have guaranteed practically every supplier, making you question why they are trading under the vehicle of a limited liability company. Others sign personal guarantees unwittingly; only to discover what they have committed to after things have gone wrong.

One of the biggest misgivings relates to the small loan guarantee scheme. Guarantors are informed the Government will guarantee 75% of the outstanding debt if things go wrong.  The problem is the “Outstanding debt” is any residue debt AFTER the bank have exhausted all avenues of recovery, including enforcement of any personal guarantees.  The last time the Conservative Party were the shadow government I was asked to advise on these schemes and my recommendations actually went into their manifesto.  Unfortunately, the scheme has still not been amended so would-be guarantors of these loan schemes need to be aware of the consequences of your business failing.

Should you be faced with a personal guarantee being pursued the advice must be that you seek independent professional advice without delay. Maintaining a clear and regular dialogue with the guaranteed company can help but an independent advisor can also look into the validity of the guarantee generally and assist you in reaching a mutual settlement rather than staring down the barrel of bankruptcy.

If you require any advice or assistance on any insolvency-related matter then please contact Gary Pettit or Gavin Bates at PBC Business Recovery & Insolvency on (01604) 212150.

A look at personal guarantees

A look at personal guaranteesA recent survey by Wirefund revealed that over half (55%) of SME business owners do not know what a personal guarantee is. This certainly matches our experience at PBC as we see many cases where company directors cannot remember whether they signed personal guarantees or not.


What is a personal guarantee?

In the last decade, there has been a trend among creditors, including banks, finance providers, landlords and, increasingly, trade suppliers, to ask for personal guarantees. As the name suggests, this is a contractual promise to pay the liabilities of another. If you’re seeking a small business loan, for example, you might be asked to provide a personal guarantee of the loan. Such guarantees are unsecured, which means they are not tied to any specific asset such as property. For the lender, such guarantees make a loan agreement more secure, as responsibility for paying it back falls not just to the borrowing company but to the individual directors involved as well.


Why do they matter?

The unsecured nature of the guarantee means that you will be personally responsible for repayment of the loan in the event it cannot be paid back by the business itself. All your personal assets, therefore, are at risk, from the family home to cars. If you do not have sufficient assets to cover the debt, then you may be made bankrupt and with it encounter all the ongoing difficulties associated with a poor credit rating. It is also worth pointing out that if several directors give a personal guarantee to the same creditor, then the creditor does not have to take action against all of them and can instead choose to pursue just one.


It is clear that personal guarantees carry significant implications, and certainly, the courts have tended to take the view that the guarantor undertook the commitment with full knowledge of the facts. It is easy to sign up in haste in order to secure funding. However, it is important to seek advice in advance to ensure the full ramifications are understood should the guarantee be called upon. You may also want to consider personal guarantee insurance to provide some protection in the event of difficulties.



Should you find yourself in a position whereby your company is failing and you are left with personal liabilities, then there are a range of options to consider from personal insolvency procedures through to negotiation of a settlement. We offer a free, confidential, no-obligation initial consultation to discuss the issues you are facing.